Kindle Books Outsell Hardcovers

[murraypaul]

Originally Posted by DMcCunney

Amazon is the world's largest catalog retailer, and the largest book retailer.

Accepting these two statements as true,

A good chunk of any house's hardcover releases are bought through Amazon.

... This statement does not neccesarily follow. It was suggested that Amazon sell proportionally less hardbacks than paperbacks compared to B&M stores. You are just stating that it is not true. Without figures from Amazon it can't be proved one way of the other.

[DMcCunney]

Originally Posted by murraypaul

Accepting these two statements as true,

... This statement does not neccesarily follow. It was suggested that Amazon sell proportionally less hardbacks than paperbacks compared to B&M stores. You are just stating that it is not true. Without figures from Amazon it can't be proved one way of the other.

No, I did not. Amazon sells both hardcover and PB releases. I would expect their breakdown of HC vs PB sales to be in line with Barnes and Noble, Borders, or any other retailer (like, say, CostCo or Sam's Club, who sell enormous numbers of books.)

Agreed, without actual sales figures from Amazon, nothing can be really proved. But I don't see Amazon's position as a catalog retailer operating over the Internet having any impact on the exact mix they sell. They sell books. Customers buy them. I see no reason for the breakdown between hardcover and paperback sales to be different for Amazon than for any other retailer, and don't assume it is.
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Dennis

[BaenSidhe]

Originally Posted by DMcCunney

They were cutting into hardcover best seller sales, which is why the publishers reacted.

That's what the publishers say and is their reasoning for the high prices and possible delay on ebook releases, but is it really true? Ebooks are a niche market and I believe there are a lot more people out there who would rather have a tangible object than electrons. Additionally, there are people who will buy the ebook, the hardcover, and maybe even the paperback version of a book.

I seriously doubt they'd ever pay for a survey to prove or disprove their belief. And if consumers believe $10-$15 is a reasonable price to spend on an ebook, publishers could make more money since people waiting for the paperback to come out might decide to buy it now instead of waiting a year or more. If there are enough ebook sales from people who would not buy the hardcover for whatever reason, they'll end up ahead.

[DMcCunney]

Originally Posted by BaenSidhe

That's what the publishers say and is their reasoning for the high prices and possible delay on ebook releases, but is it really true?

Yes.

Ebooks are a niche market and I believe there are a lot more people out there who would rather have a tangible object than electrons. Additionally, there are people who will buy the ebook, the hardcover, and maybe even the paperback version of a book.

They are a niche market now. That will not always be the case.

Yes, there are lots of folks who want tangible objects. I have both paper and ebook editions of a number of titles. I consider ebooks an addition to paper books, and not, generally, a replacement.

But consider why there is a one year delay between the hardcover and the paperback release. It's to give the hardcover time to sell, before releasing a cheaper paperback edition.

Folks who buy the hardcover aren't normally buying it because they like hardcover editions. They are buying the hardcover because they want to read the book now, and are willing to pay extra. If price is an object, they wait for the PB.

Amazon was offering Kindle editions at $9.99 of current hardcover bestsellers that retailed at 2 1/2 to 3 times that price. If you just want to read the book now, don't care about having a tangible product, and have the capability to read a Kindle ebook, which way do you jump? (Especially when the Kindle electronic edition offers instant gratification: you can place the order, pay, and download immediately and start reading.) Enough people chose the Kindle edition for the publishers to see lost revenue.

I seriously doubt they'd ever pay for a survey to prove or disprove their belief.

They might. I took a survey from HarperCollins about ebooks, looking for data on who bought them, what they bought, what price points they were comfortable with, and what additional features possible in an electronic edition might make me more willing to buy.

And if consumers believe $10-$15 is a reasonable price to spend on an ebook, publishers could make more money since people waiting for the paperback to come out might decide to buy it now instead of waiting a year or more. If there are enough ebook sales from people who would not buy the hardcover for whatever reason, they'll end up ahead.

It's all about the money.

Aside from the impact on hardcover bestseller sales of Kindle editions released simultaneously with the hardcover, they felt that Amazon's default $9.99 Kindle edition price gave consumers an unrealistically low idea of what an ebook should cost.

They have a point. Most of the costs of any book are incurred before the print, bind, warehouse, and distribute stage. (An editor I know estimates printing, binding, and distribution of the average book at about 10% of the total book budget. He's seen the numbers and has no reason to lie about it.) The cost savings a lot of folks expect because an ebook doesn't have printing, binding, warehousing and distribution costs aren't anywhere near as great as a lot of folks would like to believe, and there will be definite limits (that will vary by the book) on how cheap an ebook can be and make any money.

The average price of a mass market paperback is about $8 at the moment. If a publisher can sell an ebook edition at $10-$15 dollars instead, I'm sure they'll be delighted to. But they won't want to sell it instead of the new hardcover release, unless the pricing is such that they aren't losing significant revenue in doing so. That's what the Agency Model was all about.
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Dennis

[Fbone]

Have the shortened the window period for paperback release? It seems I see them sooner or time goes by faster than I realize.

[thadmc]

Originally Posted by Kali Yuga

NYT Article....

http://www.nytimes.com/2010/07/20/te...ndle.html?_r=2

A few salient points:

• up to 180 Kindle books for every 100 hardcovers sold, including titles where no ebook is available
• that figure does NOT include free Kindle books
• Kindle devices are still selling well, as users see a need for both iPads and a specialized reading device
• Surprise! No "hard" numbers in the article

I should'a bought some AMZN stock a few weeks ago....

Good thing you didn't!

JULY 23, 2010, 9:33 A.M. ET.Amazon Shares Fall After Increased Spending Reduces Profits

Amazon.com Inc. (AMZN) shares fell to their lowest level since October after increased spending on infrastructure and to market its Kindle e-reader cut into the online retailer's second-quarter earnings.

http://online.wsj.com/article/BT-CO-...23-707700.html

[nbvanyoos]

Originally Posted by DMcCunney

They have a point. Most of the costs of any book are incurred before the print, bind, warehouse, and distribute stage. (An editor I know estimates printing, binding, and distribution of the average book at about 10% of the total book budget. He's seen the numbers and has no reason to lie about it.) The cost savings a lot of folks expect because an ebook doesn't have printing, binding, warehousing and distribution costs aren't anywhere near as great as a lot of folks would like to believe, and there will be definite limits (that will vary by the book) on how cheap an ebook can be and make any money.

The average price of a mass market paperback is about $8 at the moment. If a publisher can sell an ebook edition at $10-$15 dollars instead, I'm sure they'll be delighted to. But they won't want to sell it instead of the new hardcover release, unless the pricing is such that they aren't losing significant revenue in doing so. That's what the Agency Model was all about.
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Dennis

I agree their production costs are probably not a big factor, but their ridiculous business model of 100% return is where they really get hurt. Also, I suspect they come up with an initial production run based on their knowledge of typical sales for hardcovers of a particular best selling author, thus creating a fixed investment in the product. I suspect the eBooks were reducing the numbers for that fixed production run, thus requiring them to "buy back" the excess inventory. If not, then this whole argument is moot since the eBooks were icing above and beyond the initial production run. This "extra" cost due to their bad business model is what eBooks don't have, thus making eBooks a better margin product in the long run.

[DMcCunney]

Originally Posted by nbvanyoos

I agree their production costs are probably not a big factor, but their ridiculous business model of 100% return is where they really get hurt. Also, I suspect they come up with an initial production run based on their knowledge of typical sales for hardcovers of a particular best selling author, thus creating a fixed investment in the product. I suspect the eBooks were reducing the numbers for that fixed production run, thus requiring them to "buy back" the excess inventory. If not, then this whole argument is moot since the eBooks were icing above and beyond the initial production run. This "extra" cost due to their bad business model is what eBooks don't have, thus making eBooks a better margin product in the long run.

The hundred percent return model has been an industry problem for decades. Everyone knew it, but no one wanted to be the first to attempt to change the terms. They were all afraid they'd lose market share to other publishers that didn't change the terms. We are only now seeing experiments in offering higher discounts to retailers in exchange for not being able to return all unsold goods, placing responsibility on them to make better guesses about what they can sell on the customer.

Meanwhile, one of the decisions made for any new paper book is the press run. The decision is made in the case of an established author based on historical data: what have their previous books sold? It's a reasonable assumption the new one will sell similar amounts. If it's a hit, and sells more, you break out the champagne and go back to press. If it tanks, you reconsider whether to keep the author under contract.

But in the specific case, it's a bit more than ebook sales forcing the publishers to "buy back" part of the production run. There will always be unsold copies returned for credit. But the manufacturing and distribution costs are a small part of the total cost of the book. Increased returns alone weren't the killer.

The problem from the publisher's viewpoint was that they were effectively competing with themselves. Imagine what would happen if a hardcover and a mass market paperback were released at the same time? How many people who just want to read the book now, and may not even intend to keep it would buy the higher priced hardcover yielding higher margins? There's a reason why the paperback doesn't get released till a year after the hardcover.

That was what was happening with Kindle editions offered at the same time as the hardcovers. People were buying the lower priced ebook instead of the hardcover. It wasn't just the cost of returns, but the lost revenue from not selling the higher priced edition.

eBooks aren't going to magically increase the book market. X number of people will buy any particular book. They may buy the hardcover, the ebook, or the paperback, but they're likely to buy only one. The publishers get the highest revenue and margins on the hardcovers, and having hardcover bestsellers probably makes the difference between making money and taking a loss for the year.

No surprise the publishers wanted to protect the hardcover sales and force ebooks to be priced to cover the revenue they'd lose if people bought the ebook instead.
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Dennis

[cfrizz]

Let them protect the price of the hard cover. I can find plenty to read until a reasonably priced ebook can come out even if it's a year later....providing I still remember I want to read it by then.

[HansTWN]

Originally Posted by DMcCunney

eBooks aren't going to magically increase the book market. X number of people will buy any particular book. They may buy the hardcover, the ebook, or the paperback, but they're likely to buy only one. The publishers get the highest revenue and margins on the hardcovers, and having hardcover bestsellers probably makes the difference between making money and taking a loss for the year.

______
Dennis

Actually, ebooks do increase the market. They make it possible for people like me who live overseas to buy, and to buy a lot more. Even in the US or Australia -- how far is it to get to the next bookstore? Might be 100 miles for quite a few. But not just that, it is so much quicker and more convenient for anybody to buy books. You read or think about something then you browse a few websites and download it immediately. No postage, no time wasted waiting, and you don't forget about it later. No worrying about storage space, etc.

So my guess is people buy a lot more electronically, once they get used to the idea.

[GA Russell]

Originally Posted by HansTWN

Actually, ebooks do increase the market...it is so much quicker and more convenient for anybody to buy books. You read or think about something then you browse a few websites and download it immediately. No postage, no time wasted waiting, and you don't forget about it later. No worrying about storage space, etc.

So my guess is people buy a lot more electronically, once they get used to the idea.

I estimate that my reading has increased six-fold since getting my jetBook Lite. However, I have been reading free books.

Amazon has lost out on a few sales to me because I have been so busy reading what I have downloaded for free that I haven't been tempted to buy a hardcopy from them. That won't last forever, but it will for the foreseeable future.

[Steven Lake]

Well, I hate to burst everyone's bubble, but Amazon's 148 to 100 sales figures also includes all of their FREE books as well, which are flying off the shelves. To improve the appearance of their ebook sales, they're counting every ebook download as a sale, regardless if the ebook was free, or if it actually cost something. So they're not actually selling 148 ebooks to every 100 print books, they're fudging their numbers to make themselves (and the Kindle) look a heck of a lot better than they really are. It's just marketing spin is all it is. In reality, they're probably only selling 25 paid ebooks for every 100 print books. And I bet if someone called out Amazon on this and asked them to show their true sales figures, it would show that they are in fact fudging numbers. But we all know they'd never do that, because it'd reveal how much they lie to the public.

[afa]

Assuming the NY Times info is correct, Steven, it seems you're wrong.

Here's a quote from the article:

The figures do not include free Kindle books, of which there are 1.8 million originally published before 1923 (they are in the public domain because their copyright has expired).

[vaughnmr]

Originally Posted by Steven Lake

Well, I hate to burst everyone's bubble, but Amazon's 148 to 100 sales figures also includes all of their FREE books as well, which are flying off the shelves.

Read the thread, my friend. It has been noted numerous times that free ebooks are not included. Geesh...

[Steven Lake]

Well, personally I'm sticking by my guns, because knowing the blatant dishonesty of Amazon goes a long way towards me taking their so called numbers with a generous helping of salt. Amazon's been caught blatantly lying about sales (and a hundred other things) before, so why should this be any different? I say that they're royally fudging the numbers. Why shouldn't they, since it benefits them greatly. The only way I'll believe them is if they open their books (and their server logs) and prove without a doubt that they're not lying, which it'll be a cold day in hell before they ever do that. So until they do that, I'm sticking by my guns, because all they have is "their word", and right now that's completely worthless.